Call for input on wealth laxes

The Davis Tax Commission invites submissions on the desirability and feasibility of possible new forms of a wealth tax in South Africa: a land tax, a national tax on property (over and above municipal rates) and an annual wealth tax on individuals.

The commission, headed by Judge Dennis Davis, was formed in 2013 to inquire into the role of the tax system in the promotion of inclusive economic growth, employment creation, development and fiscal sustainability.

The Gini coefficient, an internationally recognised measure of wealth and income inequality, shows that South Africa’s wealth inequality is higher than its income inequality.

Currently, South Africa has three forms of wealth taxation: estate duty, transfer duty and donations tax, which together bring in about one percent of tax revenue. Capital gains tax (CGT) is considered by some to be a form of wealth tax, but the commission has taken the view that CGT is a form of income tax.

The commission invites submissions on the wealth taxes by May 31. Based on the written submissions received, there will be a workshop for oral submissions during June.